Why do automobile dealerships still exist?

[Dave]

Because its the law

http://www.bostonglobe.com/opinion/2013 ... story.html





It irritates me when I go to buy a car because car salesman are usually the lowest form of scum on the earth.

[Telephant]

Pretty sure they exist to fuck you in the ass.

[rear naked]

Yeah it is quite infuriating.

[ovid9]

Working at a dealership I can tell you the system is fairly messed up. Trust me, I like my job and like my paycheck, but the whole setup puzzles me.

Typically you'll make way more money from used cars than new car sales. So, from a straight gross profit standpoint, used is the way to go for the dealer. BUT you have to keep the manufacturer happy and some customers want a new car so you have that.

Then you have salesmen who only exist to get involved in some stupid bidding war on how much you're going to pay. Why they don't do away with salesmen who can't actually work a deal (as in actually make the decision on final price) doesn't make any sense to me either. Streamline the damn process. It shouldn't take 8 hours to buy a car, I understand waiting for approval takes time, but the back and forth BS is just that BS.

The flip side of the used v. new card is that new car customers tend to be more loyal bringing their car back to your dealership if you don't fuck them over. So, in order to bring in customers to your fixed ops departments (you know the ones that actually make money) you need to sell as many as you can.

Sorry, wandered a bit.

But yeah, its screwy. Kinda like liquor distribution.

[benjamin801]

Q: Why do automobile dealerships still exist?
A: Hmmmmmm...I dunno...you know what, sit tight and let me go ask my manager.

[JonVengeance]

I found this article to be kind of funny since I work in the NADA (National Automobile Dealers Association) headquarters building. I don't work for them though. My company just leases space in their building. I have to take the stairs up to my office everyday. I don't want to be stuck in the elevator with people related to that profession

[JonVengeance]

.

[sleewell]

hate, hate, hate car salesman

the guy i just bought my car from was ok until he found out i wasnt going to fall for all the bullshit undercoating and extra warranties, then he got shitty and showed his true colors.


saw a special recently about the scumbags who go to auctions and buy flood cars, detail them and then sell them like nothing ever happened. real pieces of shit.


in regards to the article its funny/sad. they say we are free market society yet it seems like that is farthest from the truth sometimes. money buys laws that protect special interests which in actuality are really only raising the cost of goods for no other reason than to keep the wealthy rich.

[ovid9]

Q: Why do automobile dealerships still exist?
A: Hmmmmmm...I dunno...you know what, sit tight and let me go ask my manager.

This is seriously the stupidest thing ever. Why make buying a car, one of the larger purchases a typical person makes in their life worse than going to the dentist for a root canal?

Get rid of the coke-head alky salesmen who don't know shit about their products and won't follow through on any promise, replace them with driven people who can actually make decisions and get shit done.

Make it a smooth painless process and maybe people will want to come back.

"Repeat customer? WTF is a repeat customer?" Our motto.

[Schweezly]

For every one I go to and like...there are a handful that are terrible. My newest purchase, a Ford, ended up being from a dealership where everyone was pleasant to deal with. Until now...when I want to cancel the extended warranty 3 weeks later

I think a huge part of why returning/loyal customers exist is because of fear that the next dealer they go to will make there skin crawl.

[Dave]

The president of the Texas auto dealers bullshit said it was a victory keeping tesla out of Texas.


Never did give a reason why we need his sorry ass. Yeah, I love making sure a few pieces of shit stay employed.




Hidden pricing, under the table bullshit, millions of addons, endless list of BBB complaints about shady practices... Why do we need this shit? I don't have a problem with them existing. Maybe it's easier for some manufacturers to deal with, but it should be an option not a law.

[ovid9]

The president of the Texas auto dealers bullshit said it was a victory keeping tesla out of Texas.

Never did give a reason why we need his sorry ass. Yeah, I love making sure a few pieces of shit stay employed.

Hidden pricing, under the table bullshit, millions of addons, endless list of BBB complaints about shady practices... Why do we need this shit? I don't have a problem with them existing. Maybe it's easier for some manufacturers to deal with, but it should be an option not a law.

Word. I'm not sure all the manufacturers would want the hassle of dealing directly with the public, but having the option to would certainly be a good thing for customer service, competitiveness, and just general good.

[sleewell]

buying a car out of state is not a big deal at all. if i wanted a tesla and lived in tx i would be extra encouraged to buy one now after hearing that dbags comments.

[Schweezly]

It's shocking that you can't order a car direct, online. Anyone with good credit could go on countless bank sites right now and get pre-approved for an auto loan...and at a better rate than the dealer. How hard is it to find the car and have the bank pay the manufacturer?

Yes, this is an extremely basic way of thinking about it...but still.

[ovid9]

It's shocking that you can't order a car direct, online. Anyone with good credit could go on countless bank sites right now and get pre-approved for an auto loan...and at a better rate than the dealer. How hard is it to find the car and have the bank pay the manufacturer?

Yes, this is an extremely basic way of thinking about it...but still.

Well, part of the reason dealerships exist, at least for the big brands, is they absorb a lot of the costs and risks. Billions of dollars worth of vehicles, parts, etc. are off the manufacturers books and the risk is assumed by the dealership.

When Chrysler and GM were floundering (I worked at both during that time) they were forcing parts and vehicles on dealers left and right through new "programs" 1) to get the cash from dealers and 2) to get the stuff off their books, even if only temporarily.

So there is a reason for the existence as you would still need service centers and whatnot and most manufacturers probably wouldn't want to add those costs.

BUT, as RB stated, there is no good reason why it should be ILLEGAL to buy direct if a manufacturer chose to do so. And there are many good reasons to do it even if only to force dealerships to adopt better business practices to survive.

[Lloyd Blankfein]

I can fly into Wichita, Kansas right now and write a check for 5 million dollars for a brand new Cessna CJ3 jet. Directly from the manufacturer.

However, if I want a car, I have to use a middle man. Makes no fucking sense

[Schweezly]

It's shocking that you can't order a car direct, online. Anyone with good credit could go on countless bank sites right now and get pre-approved for an auto loan...and at a better rate than the dealer. How hard is it to find the car and have the bank pay the manufacturer?

Yes, this is an extremely basic way of thinking about it...but still.

Well, part of the reason dealerships exist, at least for the big brands, is they absorb a lot of the costs and risks. Billions of dollars worth of vehicles, parts, etc. are off the manufacturers books and the risk is assumed by the dealership.

When Chrysler and GM were floundering (I worked at both during that time) they were forcing parts and vehicles on dealers left and right through new "programs" 1) to get the cash from dealers and 2) to get the stuff off their books, even if only temporarily.

So there is a reason for the existence as you would still need service centers and whatnot and most manufacturers probably wouldn't want to add those costs.

BUT, as RB stated, there is no good reason why it should be ILLEGAL to buy direct if a manufacturer chose to do so. And there are many good reasons to do it even if only to force dealerships to adopt better business practices to survive.

I get it, but that's not our problem...that's their problem.

It's just a really weird business model when you think about it.

[Lloyd Blankfein]

It's shocking that you can't order a car direct, online. Anyone with good credit could go on countless bank sites right now and get pre-approved for an auto loan...and at a better rate than the dealer. How hard is it to find the car and have the bank pay the manufacturer?

Yes, this is an extremely basic way of thinking about it...but still.

Well, part of the reason dealerships exist, at least for the big brands, is they absorb a lot of the costs and risks. Billions of dollars worth of vehicles, parts, etc. are off the manufacturers books and the risk is assumed by the dealership.

When Chrysler and GM were floundering (I worked at both during that time) they were forcing parts and vehicles on dealers left and right through new "programs" 1) to get the cash from dealers and 2) to get the stuff off their books, even if only temporarily.

So there is a reason for the existence as you would still need service centers and whatnot and most manufacturers probably wouldn't want to add those costs.

BUT, as RB stated, there is no good reason why it should be ILLEGAL to buy direct if a manufacturer chose to do so. And there are many good reasons to do it even if only to force dealerships to adopt better business practices to survive.

I get it, but that's our problem...that's their problem.

It's just a really weird business model when you think about it.

No it's not. It's very common. Especially when corporations are trying to strengthen up their health on paper to attract investors/buyers, etc.

If I have a company, and I'm seeking a buyer or investment, I create spin-off corps to out my debt and funded liabilities into.

The corp I'm trying to attract business with has all my assets and capital making it appear to be strong and healthy.

Lots of people who didnt do proper and deep due diligence have been burned by such scams.

[indienoise]

It makes me cringe when people walk in our doors using the lingo they hear from most dealerships and having the same expectations as if they were in the local Chevy dealer. How we got those laws on the books is beyond me...well, I understand HOW we got here, but still, it makes no sense.

That said, there really are a lot of pluses to going through a dealership. Like, how there are laws in place to at least force them to keep their word on certain things. One thing I've learned from experience in this industry, individuals are equally, and at times even MORE, dishonest than the typical perception of a car salesman. So having a retail medium DOES really protect the consumer, to an extent. But not as much as I'm sure NADA would have you believe. And it's too bad that many dealerships have no moral compass. While the stereotypes aren't always true, well, they're stereotypes for a reason.

[Pepi]

Pretty sure they exist to fuck you in the ass.

Can we FUCK you in the ASS

[Dickarms]

The president of the Texas auto dealers bullshit said it was a victory keeping tesla out of Texas.


Never did give a reason why we need his sorry ass. Yeah, I love making sure a few pieces of shit stay employed.




Hidden pricing, under the table bullshit, millions of addons, endless list of BBB complaints about shady practices... Why do we need this shit? I don't have a problem with them existing. Maybe it's easier for some manufacturers to deal with, but it should be an option not a law.

there are both a tesla dealership and a tesla service center less than 5 miles from my north austin home.

well, i guess the dealership is a showroom....so how does that work? never been in there. i assume you can test drive from there. are the circumventing some rule and have it delivered from out of state or something?

[Dave]

Informational purposes only. Per the article the showroom can only tell you about the cars. No ordering, test drives or price discussions allowed

[sleewell]

its sort of like the morons who think illegal immigrants are going to steal their cushy office jobs


if you are that worried about tesla stealing from your sales maybe you should provide a service people actually want instead of buying laws that force them out.

[PurpleTrails]

hate, hate, hate car salesman

the guy i just bought my car from was ok until he found out i wasnt going to fall for all the bullshit undercoating and extra warranties, then he got shitty and showed his true colors.


saw a special recently about the scumbags who go to auctions and buy flood cars, detail them and then sell them like nothing ever happened. real pieces of shit.


in regards to the article its funny/sad. they say we are free market society yet it seems like that is farthest from the truth sometimes. money buys laws that protect special interests which in actuality are really only raising the cost of goods for no other reason than to keep the wealthy rich.

We stopped being a free market society a long time ago. It's gotten worse over the past two or three decades, as the current US federal economic policy is increasingly oriented away from creating growth, and more to maintaining the viability of current campaign contributors/corporations. So the economy is sort of a zero sum game, where protecting your piece of the pie is more important than working towards a bigger pie, which leads to a lot more lobbying to get special protections, incentives and the like. The more regulated an industry is, the more likely it's going to have overpriced cost of goods and services; see healthcare, military equipment, financial and energy markets.

[ovid9]

We stopped being a free market society a long time ago. It's gotten worse over the past two or three decades, as the current US federal economic policy is increasingly oriented away from creating growth, and more to maintaining the viability of current campaign contributors/corporations. So the economy is sort of a zero sum game, where protecting your piece of the pie is more important than working towards a bigger pie, which leads to a lot more lobbying to get special protections, incentives and the like. The more regulated an industry is, the more likely it's going to have overpriced cost of goods and services; see healthcare, military equipment, financial and energy markets.

Yup, I agree. Even as someone who prefers a decent level of regulation in the market its gotten to where both sides are completely bought, often by the same folks.